German state-owned development bank KfW is heading into 2024 with plans to issue a tokenised bond and launch new green investments. “Green Bonds – Made by KfW” will encompass a number of funding instruments intended for raising EUR10 to 13 billion. The funds are a part of the EUR90 to 95 billion that the bank has targeted to raise to support its business operations next year.

Going digital

In a press release announcing its plans, KfW revealed that preparations for its first tokenised bond are already underway. Describing it as “a digitalised financial product that can be recorded on a decentralised database such as a blockchain”, the bank believes that its issuance will also be a testbed for the German Electronic Securities Act’s (eWpG) legislation for decentralised digital depositories.

Green ambitions

KfW has been issuing green securities under its Green Bond Framework since 2014. Existing project categories under the framework include Renewable Energy, Energy Efficiency/Green Buildings, and Sustainability Mobility. Come 1 January 2024, it will be updated with two new categories: Biodiversity, and Corporate Investments for Climate Change Mitigation. The former gives investors the opportunity to contribute to preserving biodiversity via Green Bonds – Made by KfW. The latter “finances climate-friendly technologies in the real economy that make a significant contribution to climate action in accordance with EU Taxonomy”.

PostTrade 360 Nordic 2024